UAE panel for keeping dirham’s peg to dollar intactApril 10th, 2008 - 7:55 pm ICT by admin
(Gulf Business Capsule)
Dubai, April 10 (IANS) A commission instituted by the United Arab Emirates (UAE) government has recommended maintaining the dirham’s peg without any change in the country’s currency exchange rate against the dollar. The commission also ruled out any revaluation of the local currency.
The recommendation of the committee follows Central Bank Governor Nasser Al Suwaidi’s statement Tuesday that the UAE had no plans to change its link to the dollar or revalue its currency.
“The commission’s recommendations reflect the UAE government’s plans to maintain the dollar-dirham peg as part of its efforts to preserve the UAE’s supreme national interests as well as preserve a healthy economy in the short and long run,” the governor told the state run news agency WAM.
Vice-President and Prime Minister of the UAE and ruler of Dubai Shaikh Mohammad Bin Rashid Al Maktoum praised the commission’s recommendations, reiterating his confidence in its members’ experience as well as in their vision for the future.
Fall in Gulf business confidence
Confidence levels of the Gulf business community, though still high, have shown a consistent decline over the past year, according to the HSBC’s latest quarterly survey.
From a base index level of 100 in the first quarter of 2007, the index stands at 96.8, 12 months later.
This decline has been consistent in each quarter over the past year, the report said.
The main factors cited for the decline in outlook are high inflation and the weakness of the US dollar. The continuing high price of oil is now perceived to be having a negative impact on business.
“It is important to keep these figures in perspective. The slowing of the major western economies, the credit crunch, and the fall in global stock markets inevitably affects the outlook and sentiment of business people,” Keith Bradley, HSBC’s regional head of commercial banking, said.
“However, the Gulf’s economies continue to expand, and business people’s outlook continues to be broadly positive. The majority are expecting very healthy growth and expansion in 2008,” he said.
On the much-discussed issue of regional currencies, the number of businesses expecting a revaluation of their local currency has fallen from 59 percent in the fourth quarter of 2007 to 41 percent now.
Around half of all business people (48 percent) believe a revaluation would have a positive impact on their business.
The first quarter Index of 2008 surveyed 1,464 respondents from all six Gulf Cooperation Council (GCC) countries, with the majority coming from Saudi Arabia and the UAE.
Emirates Steel expects $5-$6 bn investment
Investment by Emirates Steel Industries (ESI) will reach $5 billion to $6 billion by 2012, according to a senior official of the company.
The company has already completed about 85 percent of its first project at the Industrial City of Abu Dhabi producing 715,041 tonnes in 2007 and targeting more than 1.45 million tonnes in 2008, at a cost of $1 billion, and is copying the same project at a similar cost, the Gulf News reported.
“The biggest problem that we face is finding the necessary staff, as we went through a very painful process touring the world to get our workforce which is standing now at 670 people, and will reach to 1,070 soon,” Husain Al Nowais, ESI’s chairman was quoted as saying.
To overcome this shortage, the company has adopted two programmes for the short and long term to qualify UAE nationals as industry experts and technicians.
“We are accomplishing this in coordination with the Petroleum Institute on one hand in the field of metals, and with the Abu Dhabi Vocational Institute in case of technicians on the other,” Al Nowais said.
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